City’s Slumlord Watchdog Leaves: Assessing His Tenure

January 26, 2011

Mayor Michael Bloomberg announced the resignation of housing commissioner Rafael Cestero last Friday. Cestero leaves the city agency of Housing Preservation and Development — the largest developer of affordable housing in the country — for L+M Partners, a private local affordable housing developer with a solid reputation.

Here at the Voice, we’ve been aggressively chronicling landlords and tenants for much of Cestero’s tenure at HPD, which occurred during a tough economic time when many apartment buildings were abandoned or went through foreclosure. The landlords of many of these buildings, including the ten-building Milbank portfolio and former of Ocelot building bought by Queens developer Sam Suzuki, ended up on our Ten Worst Landlords list.

We watched closely to see what HPD would do about some of these disasters. In housing circles, Cestero is known as a dealmaker. He, along with local politicians, has gotten actively involved in ensuring that the new buyer of the Milbank portfolio will be a responsible buyer who won’t abandon the properties, as Milbank did. Cestero also helped broker the deal to get the Ocelot buildings into good hands .

But it’s unclear how much of the initiative was his. Housing advocates had identified problems in the buildings early on (before both the city got on board and journalists started sounding alarms); the buildings already had gotten to a very bad state before these rescue deals went through. And the successful handling of these high-profile portfolios should be a lesson for the future: the city estimates that before 2012, more than 100,000 units of affordable housing will go into foreclosure. HPD still has a lot on its plate.

Bloomberg complimented Cestero’s record in this way: “He led the launch of the updated plan to keep the City on track to meet the goal of 165,000 affordable housing units by 2014″…and “created a $750 million initiative to stabilize distressed multi-family properties.” Bloomberg also gave Cestero a nod for initiating a program last week that will make the city more likely to identify a building that is starting to crumble, before a full disaster has taken place.

The $750 million initiative is a big deal, housing advocates say. Part of it is used to give landlords incentives to buy properties that are in really bad shape. The subsidies are only available to developers with a good reputation (This of course, doesn’t prevent speculators from buying buildings and neglecting them — and this has happened under Cestero — but it gives a leg up to the ‘good guys.’) The fact that the city’s has added over one hundred thousand new affordable housing units is a good thing too, but it has barely counterbalanced the huge loss of affordable housing that took place in the early part of the Bloomberg years, when tens of thousands of units were deregulated during a run up in real state prices (Think Stuy Town).

For us, Cestero’s last act in office was one of his most important. Too many landlords flout the city’s housing code, and then find ways to avoid paying for the damages. As we’ve reported on this blog, the program currently in place to deal with the city’s most neglected properties has had mixed results — mainly because the landlords don’t face much pressure to actually clean up the properties or pay for their actions, since the city is obligated to do the work anyway.

That may change: last week, Bloomberg and Cestero told the Voice that they planned to find a way to close a legal loophole that makes it easy for slumlords to avoid paying millions of dollars in back taxes to the city. That’s good, because over 500 buildings are still in the city’s worst properties program, some languishing in the program for years on end.

Cestero knows well that too often, when the city finally steps in in full force to save a building from utter wreckage, it’s already too late: tenants have been living in hazardous and miserable conditions for too long (Take the “city’s worst bathroom,” at 2356 Lorillard Place in the Bronx, for example. According to violation reports, the bathroom started to fall apart one year and three months before the city actually certified that it was fixed. This was after a pipe had exploded and was spewing hot water 24/7, a giant chunk of the ceiling had collapsed due to water damage, and the floor around the toilet had completely caved in.). Now the city is promising that it will step in before living conditions become intolerable. We’ll be watching Cestero’s successor to see if the agency makes goods on that promise and others.

Names that the Voice has heard floated to replace Cestero include Doug Apple, a former head of NYCHA who is Cestero’s deputy, and Brian Lawler, who heads the state’s Division of Housing and Community Renewal.